Tuesday, January 6, 2009


I was watching Carmen's "On The Money" show just now and realized the seriousness of the lack of financial education that the average American possesses. It's scary. People are relying on advisors and money managers. Chances are, if you have to go to these people, you're wealthier than them. I don't understand why wealthy people go to people who are not for "sound" financial advice. It still boggles me. Many (not all) are the same folks that dropped the financial industry to its knees. This is why I stress self-education. No one cares more about your money -- than you.

These spikers sure are a great way to start off 2009. I am up +19.2% for the month/year and I have/had stuff like ACAS, ARTC, FIG, GFIG, FTK, and others to thank. Days like yesterday and today do not come often, and usually by the time these stocks are "discovered", it is time to short. Many names have become so extended that they are now completely outside of their upper bollinger band. I am looking for a bearish gap up/down or a doji to form to execute short trades on the very same names that made me much coin on the long side. Don't chase during the late stages or, you'll get face fudged.

As for the broad market, we are still consolidating and we are, indeed, short-term overbought. The more consolidation days that we have (while maintaining the 920 level), the better. Why? Because it relieves the overbought situation and brings many of these indicators back to the mean. Volume is still picking up, but we are not at "normal" levels yet. Also, notice the 2nd doji on the 4-month chart. That's normal. It is possible that we could be testing the 920 level again, so be prepared for that.

On a different note, I think some of you still do not know how to use my charts. You are an idiot, because I've explained too many times. Let me give you a lesson that even my 8 year old cousin could understand. The charts are used for 1) identifying support/resistance levels to anticipate the next day's bounces (so you don't become the idiot that panics and sells/covers), 2) identifying possible reversal/pivot points via divergences (so you don't get caught with your pants down), 3) identifying entry/exit points for future trades (so you don't get killed 5 mins after you place a trade), among others. Don't be a dumbass, try to look beyond the obvious, captain.

SPX 5-day

SPX 10-day

SPX 40-day

SPX 4-month

Don't forget to try the Free Trend Analysis. It's FREE, so give it a shot!


Anonymous said...

John youre a rockstar, thank you for taking the time. your charts are great.

John C. Lee said...

you are very welcome.